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Federal Reserve Bank
OF DALLAS
T O N Y J . SALVA G G IO

first vice president

November 6, 1991

d a lla s , te x a s

75222

Notice 91-91
TO:

The Chief Operating O ffic e r of
each fin a n c ia l i n s t i t u t i o n in the
Eleventh Federal Reserve D i s t r i c t

SUBJECT
Operating Circular 12
(Check and Return Item Settlement and Delivery)
DETAILS
As stated in C irc u la r 90-92 and C irc u la r 90-93, a l l
issued by the Federal Reserve Bank o f Dallas w i l l be renamed
Operating C irc u la rs in order to conform to the language used
Commercial Code. Accordingly, B u lle t in 12 is being reissued
C irc u la r 12 (Check and Return Item Settlement and D e liv e ry ).

the b u lle tin s
and reissued as
in the Uniform
as Operating

ENCLOSURE
Enclosed is Operating C irc u la r 12. Please f i l e i t in your Operating
C irculars ( B u lle tin s ) binder and discard the old version.

MORE INFORMATION
For more information regarding check and return item settlement and
d e liv e ry , please contact Robert Whitman, (214) 698-4357, at the Dallas O ffic e ;
Eloise Guinn, (915) 521-8201, at the El Paso Branch; Luke Richards, (713) 652­
1544, at the Houston Branch; or Herb Barbee, (512) 978-1402, at the San
Antonio Branch.
For additional copies o f t h is Bank’ s notice or Operating C irc u la r
12, please contact the Public A f f a i r s Department at (214) 651-6289.
Sincerely,

r

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal Reserve Bank of Dallas:
Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012; Houston Branch Intrastate (800) 392-4162,
Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

O e tin (M ar
p ra g
F e d e r a l

R e s e r v e

B a n k

of

D a l l a s

Check and Return
Item Settlement
and Delivery

Scop
Operating Circular 12 sets forth the terms and conditions under which the Federal Reserve Bank
of Dallas and its Branches at El Paso, Houston, and San Antonio will automatically settle to an
account on the books of the Federal Reserve Bank for commercial cash letters, return item letters,
and related adjustments or entries. It also covers this Bank’s off-premises delivery of cash letters
and the presentment of return letters.

F ederal R eserve B a n k of D allas

11-91

. T beafdntents ir
al
CHECK AND RETURN ITEM SETTLEMENT AND DELIVERY
Paragraphs
G eneral...............................................................................................

1-3

Method of Paym ent..........................................................................

4 -7

Advices and Adjustments..................................................................

8-9

Entries for Cash Letter Deposits, Return Letter
Deposits, and Adjustment and Service Charges....................... 10-11
Tim ing................................................................................................

12

Delivery and Presentment................................................................. 13-14
Succession..........................................................................................

15

Suspension......................................................................................... 16-17
Term ination.......................................................................................

18

Right to A m end..................................................................................

19

Exhibit 1: Automatic Charge/Credit Agreement
Exhibit 2: Letter of Authority to Deliver Cash Letters
and/or Return Letters

11-91

F e d e ra l R ese rve B a n k of D allas

Ge n e r al
11. This Operating Circular provides for paym ent

by autom atic charge to an account at a Federal
Reserve Bank m aintained or used by a bank (as
paying or depositary bank) for the gross am ounts
o f cash letters and return letters received from this
Bank and for other credits or debits and fees in
connection with cash letters, cash items, return
letters, or returned checks handled o r accounted
for by this Bank. This Operating Circular also
provides for requests for delivery and presentm ent
o f cash letters and return letters, if applicable, to
locations other than the premises o f a bank. This
Operating Circular is issued pursuant to Sections
4, 13, 14(e), and 16 o f the Federal Reserve Act and
related statutes and in conform ity with the provi­
sions o f related statutes and Subpart A o f Regula­
tion J and Subpart C o f Regulation CC o f the
Board o f Governors o f the Federal Reserve System.
It is binding on each party interested in an item
this Bank handles.
2. The definitions o f term s set forth or incorpo­
rated in Regulation J, term s defined in Regulation
CC, and term s defined in this Bank’s Operating
Circular 8 (Bulletin 8) apply in this Operating
Circular, except as otherwise provided. “Respon­
dent” is defined as a bank or nonbank payor that
receives from or presents to this Bank cash items
or returned checks for paym ent or credit. “C orre­
spondent” is defined as a bank that settles for
another bank through its own account at the
Federal Reserve Bank. M any term s used in this
Operating Circular have specialized meanings that
have developed through law, custom, or com m er­
cial usage. Unless otherwise stated, references such
as “this Bank,” “we,” “us,” and “o u r” are to the
Federal Reserve Bank o f Dallas and its Branches at
El Paso, Houston, and San Antonio.
3. This Operating Circular also applies to any
state or political subdivision o f a state to which we
present direct as cash items any bills, notes, or
warrants that are issued by the state or political
subdivision and that are payable in the Eleventh
Federal Reserve District.

M e t h o d o f Pa y m e n t
4. If paym ent for cash letters and return letters is
to be m ade by charge to a respondent’s account on
our books or by charge to the account o f another
bank (correspondent bank) on our books or on
the books o f another Federal Reserve Bank (by

11-91

arrangem ent), the respondent bank m ust execute
our Autom atic Charge/Credit Agreement
(“autocharge agreem ent”), Form TR-383. By
execution o f the agreement, the ban k also agrees to
the term s o f this O perating Circular and our
Operating Circulars 8 and 10 (Bulletins 8 and 10),
which pertain to the collection and return of cash
items. If the settlement is to be posted to another
bank’s account on our books, the correspondent
bank m ust authorize such action and agree to the
term s o f this Operating Circular by signing the
autocharge agreement.

Operating
Circular

12

5. W e charge the account m aintained or used by
the paying bank for the gross am ou nt o f cash
letters on the banking day o f receipt o f the cash
letters, as provided in Section 210.9 o f Regulation I
and in Operating Circular 8. W e charge the
account m aintained or used by the depositary
bank for the gross am o un t o f return letters on the
banking day o f receipt o f the return letters, as
provided in Section 229.32 o f Regulation CC and
in Operating Circular 8.
6. A bank paying for cash letters or return letters
by a charge to its own account agrees to m aintain
to its credit, in its reserve or clearing account on
our books, a balance o f actually and finally col­
lected funds sufficient to cover charges under this
Operating Circular and all other charges to the
b ank’s account.
7. If paym ent for cash letters o r return letters is to
be m ade by a charge to a correspondent bank’s
account on our books, the correspondent bank
agrees to m aintain to its credit, in its reserve or
clearing account on our books, a balance of
actually and finally collected funds sufficient to
cover charges under this Operating Circular and
all other charges to the bank’s account. Unless
otherwise agreed by the respondent bank and its
correspondent bank, the respondent bank agrees
to m aintain in its account with the correspondent
bank a balance, free from any encum brance,
sufficient to cover all charges under this Operating
Circular; and the correspondent bank may debit
and credit to the respondent bank ’s account the
am ou nt o f any debit or credit m ade by us to the
correspondent bank’s account, under this O perat­
ing Circular, for entries to the respondent bank.
But we assume no responsibility for any obliga­
tions o f the respondent bank and its correspon­
dent bank to each other.

F e d e ra l R es e rv e B a n k of D allas

1

Operating
Circular

12

A d v ic e s a n d A d j u s t m e n t s
8. W e send to a bank and to its correspondent
bank an advice o f charge for ou r cash letter or
return letter. The bank m ust notify us, by a
telephone call to the C ustom er Assistance Division
or to the Adjustm ents Division of its local Federal
Reserve office, o f nonreceipt o f a cash letter or
return letter. The bank m ust notify, by prescribed
form, the Adjustm ents or Return Items Division of
the office that sent the cash letter or return letter of
a difference exceeding $1 between the am ount of
the items received in a cash letter or return letter
and the am ount o f an advice o f charge. If we
receive pro m pt notice, we will make an appropri­
ate credit or debit to the account m aintained or
used by the respondent bank. If a bank subse­
quently receives the cash letter, return letter, or
item that was credited by us upon receipt o f a
notice o f nonreceipt or difference and it is not
covered by another advice o f charge, the bank
m ust prom ptly notify the Adjustm ents or Return
Items Division o f the office that sent the cash letter
or return letter. W e will charge the account
m aintained or used by the bank for the letter or
item. W e reserve the right to make appropriate aso f adjustm ents for reserve purposes if we do not
receive p ro m p t notice. See Operating Circular 8
for the handling o f missent items.
9. An account holder m ust notify us prom ptly o f
any objection to our statem ent o f account regard­
ing charges or credits for cash items, cash letters,
return letters, or adjustm ents thereto.

ENTRIES FOR CASH LETTER DEPOSITS,
R e t u r n L e t t e r D e p o s it s , a n d
A d j u s t m e n t a n d Se r v ic e C h a r g e s
10. U nder this Operating Circular, we also credit
or debit the account m aintained or used by a bank
for cash letters sent to us by the bank for collec­
tion, for return letters sent to us by the bank for
return, for other transactions with cash letters and
return letters sent by the bank to us for collection
and return, and for cash letters and return letters
received by the bank from us, including service
charges. W e send advices o f credit or debit to the
bank and its correspondent bank. Settlement for
noncom m ercial cash letters (U.S. Treasury checks,
savings bonds, postal m oney orders, and food
coupons) is no t covered under this Operating
Circular.

2

11. W e give credit for cash items or return checks,
upon receipt at this Bank’s office, that have been
sent with our perm ission to a relay station m ain­
tained by us. Senders are responsible for filling o i ^ P
receipts for deposits at a relay station, and we have
no responsibility for identifying items lost between
a relay station and our office.

T im in g
12. Deferred credits or debits will be posted to a
designated account at the tim e o f origin. Because
we process 24 hours a day, it may be necessary to
post some entries (online adjusting entries and offsite cash letter charges) to a newly designated
account one banking day before the designated
effective date on the autocharge agreement.

DELIVERY AND PRESENTMENT
13. W e may make delivery and presentm ent to
locations other than a bank ’s own premises, as
provided in Operating Circular 8 and this O perat­
ing Circular. If a bank wants delivery or present­
m ent o f cash letters or return letters to be m ade to
a location other than its own premises, either
within or w ithout the territory of our processing
office, or if a bank has n ot m ade other arrange­
m ents and we m ust mail its return letters to the
bank, it m ust execute our Letter o f Authority to
Deliver Cash Letters and/or Return Letters, Form
TR -411. The bank agrees that any loss of, damage
to, or expenses o f tracing and duplicating any item
occurring after delivery or presentm ent thereof by
us and before return o f any such item to us shall be
at its risk and expense. The bank also agrees to
hold us harmless from any loss incurred by reason
of, or arising out of, any delivery or mailing by us
hereunder and from any loss incurred by reason
of, or arising out of, the respondent ban k’s failure
to perform any o f its obligations. The bank further
agrees to com ply with the provisions o f Regulation
J, Regulation CC, our Operating Circular 8, and
this Operating Circular, including the timely
return of unpaid items, as if the cash letters or
return letters had been delivered directly to the
respondent bank.
14. If a respondent bank appoints a processing
organization to receive its items, it also appoints
and entitles the processing organization to be the
bank’s agent to m ake the notifications and re­
quests called for in our operating circulars and in
Board regulations and to forward return checks to
us. This appointm ent of the processing organiza-

F e d e ra l R e s e rv e B a n k of D allas

11-91

tion as agent does not relieve the respondent bank
o f any liabilities to this Bank un der this Operating
Circular or otherwise.

I

R ig h t t o A m e n d

Operating
Circular

12

19. We reserve the right to am end this Operating
Circular and any appendix, exhibit, or supplem ent
to it at any time.

Su c c e s s io n
15. A nam e change, merger, or succession does
no t term inate an agreem ent hereunder. However,
we request that a new agreem ent be filed with us in
a timely m anner.

Su s p e n s io n
16. A correspondent bank or respondent bank
may suspend its authorization for a specific daily
autom atic charge to its account by delivering
written notification to an officer o f the Financial
Planning and C ontrol D epartm ent or Payments
M echanism D epartm ent at the respondent bank’s
local Federal Reserve office by 1:00 p.m. If the
respondent bank suspends an autom atic charge, it
m ust furnish other acceptable and timely paym ent
to us, or the charge will stand. If the correspondent
bank suspends a specific daily autom atic charge, it
also m ust notify an officer o f the respondent bank
by 1:00 p.m.
^ ^ 1 7 . 1 he charge will be m ade to the correspondent
ban k’s account unless remittance in an alternative
form acceptable to this Bank is received by the end
o f o ur banking day. The suspension does n ot affect
the continuing existence o f the autocharge agree­
m ent, which remains in place until terminated.

T e r m in a t io n
18. Agreement to this Operating Circular may be
term inated by this Bank, the respondent bank, or
the correspondent bank (as to paym ent) and by
this Bank, the respondent bank, or the processor
(as to delivery and presentm ent) by delivery o f a
written notice or replacement agreement. Notice
to this Bank will be effective five banking days after
receipt o f the notice by us or on another day,
specified in the notice, that is agreeable to us.
Term ination by this Bank will be effective at the
tim e stated in our notice. Term ination will not
affect our right to make entries to the account for
all cash letters or return letters handled or dis­
patched by us and for all adjustm ents initiated by
^ ^ u s before the term ination.

11-91

F e d e ra l R ese rve B a n k of D allas

3

EXHIBIT 1
AUTOM ATIC CHARGE/CREDIT AGREEMENT
o:

Federal Reserve Bank of Dallas at
□

Dallas

□

El Paso

□

Houston

□

San Antonio

T h e _______________________________

respondent bank, and
correspondent bank (if applicable),
agree to the terms and conditions set forth in your Operating Circular 12 fo r the automatic charging and crediting
of entries pertaining to the collection and return of cash items.
We, the respondent bank and/or correspondent bank, hereby authorize the Federal Reserve Bank to make
entries to our account as follows:
□
□

1 (a) Charge correspondent's account for cash items drawn on respondent.
(b) Charge respondent's account for cash items drawn on it.

□

2 (a) Charge/creditcorrespondent'saccountfor return letters and subsequentcash letter adjustments.
(b) Charge/credit respondent's account for return letters and subsequent cash letter adjustments.

□

□

3
□

(a) Credit correspondent's account for commercial cash letters deposited by respondent and make
related adjustments thereto.
(b) Credit respondent's account for commercial cash letters it deposits and make related adjustments
thereto.

Service fees w ill be posted to the same account as the related service.
This agreement w ill become effective on
and should be received at the
^J^Federal Reserve no later than five (5) business days before the stated effective date.
We, the party(ies) below, have caused this agreement to be executed by our duly authorized officer(s).

Name of Respondent Bank

Routing Number(s)

Location

(
)
Telephone Number

City

Mailing Address

City

Authorized Signature

State

ZIP

Printed Name and Title

We agree to be the correspondent bank fo r the above-named respondent bank and agree to the terms
and conditions set forth in your Operating Circular 12. We authorize you to charge and/or credit our account on
your books, as evidenced in this agreement.

Name of Correspondent Bank

Routing Number (Account)

^Mailing Address

City
TR-383 (8-90)

Authorized Signature

State

ZIP

Printed Name and Title

EXHIBIT 2

LETTER OF AUTHORITY TO DELIVER CASH LETTERS AND/OR RETURN LETTERS

To:

Federal Reserve Bank of Dallas at
□

Dallas

□

El Paso

□

Houston

□

San Antonio

The__________________________________________________________________________
(N am e , Office, Routing N u m b er of the Depository Institution)

hereby requests you to make presentment of all drafts, checks, and other cash items drawn on us and being
presented by or through your Bank to our agent (processor), listed below, by the delivery of said items to
processor or to its messenger. By making this request, this institution agrees to the terms and conditions set forth
in Regulation J and Regulation CC of the Federal Reserve Board of Governors, Federal Reserve Bank of Dallas'
Operating Circulars 8 and 12 pertaining to the collection and return of cash items, and any amendments and
changes to the regulations and operating circulars that may be made hereafter.

______________________________________________________ (
Name of Processor (Agent)

Delivery Location

_________________________
)

Telephone Number

City

State

ZIP

Routing Number

We also request and authorize the delivery of our return letters as indicated below.
Check One:
□

Please deliver our return letters with our cash letters to our processor. Processor has agreed to accept
our return letters and other settlement documents from the Federal Reserve.

□

Please make our return letters available for pickup at the Federal Reserve office.

□

Please mail our return letters to us.

□

Other:_______________________________________________________________________________ .

This agreement will become effective o n _______________________ and should be received at the
Federal Reserve no later than five (5) business days before the stated effective date.

Name of Respondent Bank

Location

#

Routing Number(s)

City

Mailing Address

City

TR-411 (8-90)

(
)
Telephone Number

Authorized Signature

State

ZIP

Printed Name and Title


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102